GameStop CEO Says Next Xbox Won't Block Used Games

The CEO of GameStop predicts that Microsoft's next console won't block used game sales because the preowned market is too important to the health of the industry.

The rumor went up in January that Microsoft's next game console will feature some sort of "anti-used game" technology to help combat the grievous losses suffered by the videogame industry at the hands of people who like to help finance the purchase of new games by trading in their old ones. It struck me as kind of a crazy idea and it turns out that I'm not alone in that feeling, although GameStop CEO Paul Raines phrased it a little more gently, telling investors that it's "unlikely" to happen.

Implying that he's already spoken to Microsoft on the matter, he said that Microsoft and Sony both "have great relationships with us" and noted that used games sales "have a residual value."

"Remember that GameStop generates $1.2 billion of trade credits around the world with our used game model," he said. "So, consider taking used games out of that, you'd have to find new ways to sell the games."

Cowan & Company analyst Doug Creutz echoed Raines' position, dismissing suggestions that the new Xbox could be a disc-free console. "We believe a digital-only next-gen Xbox is unlikely given risks to both Microsoft's market share and the gaming ecosystem as a whole from any attempt to kill used games," he wrote in a research note. "However, we do believe that Microsoft may be targeting a cheaper physical solution in an effort to get the initial price of the box down and speed up new console adoption, which would be bullish for software publishers."